1999 Annual Report - Altium

Protel International Limited
and Controlled Entities
1. Statement of significant accounting policies
This general purpose financial report has been prepared
in accordance with Accounting Standards, other
authoritative pronouncements of the Australian
Accounting Standards Boards, Urgent Issues Group
Consensus Views and the Corporations Law.
The principal accounting policies adopted in preparing
the financial statements of Protel International Limited
are stated to assist in a general understanding of this
financial report. These policies have been consistently
applied except as otherwise indicated. Comparative
information is reclassified where appropriate to
enhance comparability.
(a) Basis of accounting
The financial statements have been prepared on the basis
of historical costs and do not take into account current
valuations of non-current assets. Cost is based on the
fair values of the consideration given in exchange for
the assets.
Non-current assets are revalued from time to time as
considered appropriate by the directors and are not stated
at amounts in excess of their recoverable amounts.
Except where stated, recoverable amounts are not
determined using discounted cash flows.
(b) Principles of consolidation
The consolidated accounts incorporate the assets and
liabilities of all entities controlled by Protel International
Limited as stated in note 13 as at 30 June 1999 and the
results of all controlled entities for the year then ended.
Protel International Limited and its controlled entities
together are referred to in this financial report as the
consolidated entity. The effects of all transactions
between entities in the consolidated entity are
eliminated in full.
(c) Income tax
Income tax has been brought to account using the
liability method of tax effect accounting, whereby the
income tax expense in the profit and loss statement is
matched with the accounting profit after allowing for
Notes to the Financial Statements
permanent differences. The future tax benefit relating to
tax losses is not carried forward as an asset unless the
benefit is virtually certain of realisation. Income tax on
cumulative timing differences is set aside to the deferred
income tax or the future income tax benefit accounts at
the rates which are expected to apply when those timing
differences reverse.
No provision is made for additional taxes which could
become payable if certain reserves of the foreign
operation were to be distributed as it is not expected that
any substantial amount will be distributed from those
reserves in the foreseeable future.
(d) Depreciation of plant and equipment and amortisation of
leasehold improvements
Plant and equipment are depreciated and leasehold
improvements are amortised over their estimated useful
lives using the straight line or diminishing value method.
The expected useful lives of the assets are as follows:
Office equipment 3 - 5 years
Computer hardware and software 2 - 3 years
Motor Vehicles 4 - 5 years
Leasehold improvements Lifetime of the lease
Profit or loss on disposal of plant and equipment are
brought to account in determining the result for the year.
(e) Inventories
Finished goods are stated at the lower of cost and net
realisable value. Cost comprises direct materials and direct
labour. Costs have been assigned to inventory quantities on
hand at balance date using the first in first out basis.
(f) Receivables and revenue recognition
Schedule 4/1
Amounts disclosed as revenue are net of returns, trade
allowances, duties and taxes paid. A sale is recorded
when goods have been despatched to a customer
pursuant to a sales order and the associated risks have
passed to the carrier or customer.
All trade debtors are recognised at the amounts
receivable as they are due for settlement no more than
30 days from the date of recognition.
ANNUAL REPORT 17